6th Laksana Report: Implementation of the Prihatin Rakyat Economic Stimulus Package (PRIHATIN)

On 19 May 2020, the Minister Of Finance, Yb. Tengku Dato’ Sri Zafrul Tengku Abdul Aziz, gave a speech detailing the Implementation of the Prihatin Rakyat Economic Stimulus Package (PRIHATIN).

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EY: Indirect Tax Alert – Amendments to the Service Tax Regulations and Order

On 13 May 2020, the following Regulations and Order in relation to Service Tax and Service Tax on Digital Services (“SToDS”) were published on the Official Federal Gazette website, and the same came into operation on 14 May 2020:

►     Service Tax (Amendment) Regulations 2020

►     Service Tax (Digital Service) (Amendment) Regulations 2020

►     Service Tax (Person Exempted from Payment of Tax)(Amendment) Order 2020

We have summarized the key amendments of the above-mentioned Regulations and Order for your ease of reference, as follows:

LegislationKey amendments
Service Tax Regulations 2018

– Service Tax (Amendment) Regulations 2020

  • Expansion of group relief facility to include the provision of digital services
    • Companies are now able to apply group relief (i.e., intra-group exemption) on the provision of digital services to any company within the same group of companies, under Group G: Professionals, First Schedule of the Service Tax Regulations 2018.
    • Where a company acquires digital services from any company other than a Foreign Registered Person (“FRP”) within the same group of companies outside Malaysia, such services shall not be considered as imported taxable services.

 

  • Amendments to the provision of digital services
  • The provision of digital services has been amended to include the provision of an electronic medium that allows the suppliers to provide supplies to customers. The provision of an electronic medium and digital services which were previously categorized as separate items under Group G: Professionals, First Schedule of the Service Tax Regulations 2018 have been folded and combined accordingly.
  • Furthermore, the provision of digital services will not be considered as a taxable service if such service relates to matters outside Malaysia.

Service Tax (Digital Service) Regulations 2019

– Service Tax (Digital Service) (Amendment) Regulations 2020

 

  • Introduction of group relief facility on digital services provided by an FRP to a group of companies
  • The amendments allow an FRP to apply group relief (i.e., intragroup exemption) on the provision of digital services to any company in Malaysia within the same group of companies, and such digital services shall not be subject to service tax.
  • However, should the FRP also provide the same digital services to any company outside the group of companies in Malaysia (i.e., third party), such digital services provided to both companies outside and within the same group of companies will be subject to service tax.
  • For the purpose of assessing whether a company is considered as being in the same group of companies with the FRP, the regulations laid down in Paragraphs 4, 5, 6 and 7, First Schedule of the Service Tax Regulations 2018 shall be referred to.

 

Service Tax (Person Exempted from Payment of Tax) Order 2018

– Service Tax (Person Exempted from Payment of Tax) (Amendment) Order 2020

 

  • Amendment to the service tax exemption conditions for a person who acquires digital services from an FRP
  • The amendment pertains to the service tax exemption for any person who, in carrying on his business, acquires digital services from an FRP.
  • One of the conditions for the exemption, that the acquisition of digital services is not for personal consumption, has been removed.

The full and complete version of the above-mentioned Regulations and Order can be found in the official link of the Federal Gazette website.  

MITI discussion on the current Conditional Movement Control Order (CMCO) with special guest Director-General of Health, YBhg. Datuk Dr. Noor Hisham Bin Abdullah

AMCHAM along with around 40 other business associations and chambers of commerce met today at MITI Tower for a discussion with the Directors General of both MITI and Health accompanied by representatives from MDTC, MKN, MOHR (DOSH), PERKESO, BNM, and CIPB. 

The three-hour session was highly interactive with the Director-General of Health YBhg. Datuk Dr. Noor Hisham explained the strategy of his Ministry that successfully contained the outbreak of COVID-19 and, how they are continuing to take a measured approach to balance the gradual opening of the economy and the capacity of the healthcare system to manage potential spikes. Questions and discussions were held around SOPs, contact tracing, conflicting implementation rules, returning expatriates were among the many points raised. 

The DG of Health also reminded all of us present that they are doing as much as they can but ultimately it is in the hands of the people, individually, and their choices and actions every day, that will contain the spread of the virus.  He encouraged companies to help the community and their workers to be aware and responsible.

Legal Updates from Christopher & Lee Ong (a member firm of Rajah & Tann Asia)

Law firm Christopher & Lee Ong would like to share their Malaysian legal updates answering commonly asked questions linked to the COVID-19 pandemic from industry players mostly and affected businesses. Click on the articles below for learn more:

Micron Strives to Make the “New Normal” Similar to the Old One

EY Special Tax Alert No. 12/2020 – Extended Conditional Movement Control Order – IRB’s guidance and concessions

EY is proud to share the latest Special Tax Update. This edition covers:

•       Frequently Asked Questions on International Tax issues due to COVID-19 travel restrictions

•       Frequently Asked Questions on Tax matters during the Movement Control Order and the Conditional Movement Control Order period – updated on 15 May 2020

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